BILL NUMBER: SB 2015	CHAPTERED  09/18/00

	CHAPTER   475
	FILED WITH SECRETARY OF STATE   SEPTEMBER 18, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 16, 2000
	PASSED THE SENATE   AUGUST 25, 2000
	PASSED THE ASSEMBLY   AUGUST 22, 2000
	AMENDED IN ASSEMBLY   JULY 3, 2000
	AMENDED IN ASSEMBLY   JUNE 20, 2000
	AMENDED IN ASSEMBLY   MAY 31, 2000
	AMENDED IN SENATE   APRIL 10, 2000
	AMENDED IN SENATE   MARCH 27, 2000

INTRODUCED BY   Senator Sher

                        FEBRUARY 25, 2000

   An act to amend Section 12598 of, and to add Sections 12586.1,
12586.2, 12591.1, and 12591.2 to, the Government Code, relating to
charitable fundraising.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 2015, Sher.  Charitable fundraising.
   Under the Supervision of Trustees and Fundraisers for Charitable
Purposes Act, charitable corporations or trustees, commercial
fundraisers, fundraising counsel, or coventurers who hold or solicit
property for charitable purposes are required to file a registration
statement and an annual financial report with the Attorney General.
The act also authorizes the Attorney General to make any additional
rules and regulations that may be necessary for the administration of
the act.
   This bill would authorize the Attorney General to refuse to
register, or to revoke or suspend the registration of, a charitable
corporation or trustee, commercial fundraiser, fundraising counsel,
or coventurer whenever the Attorney General finds that the person has
violated or is operating in violation of the act.  The bill would
subject the actions of the Attorney General to the administrative
adjudication provisions of the Administrative Procedure Act.  The
bill would also authorize a late fee for the failure to register, be
bonded, complete annual reports within specified time periods, timely
file the annual registration/renewal form, or correct deficiencies
in a registration or an annual report, as specified.
   The bill would also make any person who violates the act liable
for a civil penalty.  It would authorize the Attorney General to
accept an assurance of voluntary compliance through which any person
alleged to be engaged in any method, act, or practice in violation of
the act agrees to discontinue that method, act, or practice.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 12586.1 is added to the Government Code, to
read:
   12586.1.  In addition to a registration fee, a charitable
corporation or trustee, commercial fundraiser, fundraising counsel,
or coventurer may be assessed a late fee or an additional fee of
twenty-five dollars ($25) for each month or part of the month after
the date on which the registration statement and financial report
were due to be filed or after the period of extension granted for the
filing if the charitable corporation or trustee, commercial
fundraiser, fundraising counsel, or coventurer does any of the
following:
   (a) Exists and operates in California without being registered.
   (b) Solicits contributions in California without being registered
or, if applicable, bonded.
   (c) Fails to file its first report no later than four months and
15 days following the close of each calendar or fiscal year and has
not requested an extension of time to file the annual report.
   (d) Fails to file its subsequent annual report no later than four
months and 15 days following the close of each calendar or fiscal
year subsequent to the filing of the first report and has not
requested an extension of time to file the annual report.
   (e) Fails to file its annual registration/renewal form within the
time specified by the Attorney General irrespective of other report
filing requirements.
   (f) Fails to correct the deficiencies in its registration or
annual report within 10 days of receipt of written notice of those
deficiencies.
  SEC. 2.  Section 12586.2 is added to the Government Code, to read:

   12586.2.  All fines, penalties, attorney's fees, if any, as
authorized by law, and costs of investigation paid to the Attorney
General pursuant to Section 12598 shall be used by the Department of
Justice solely for the administration of the Attorney General's
charitable trust enforcement responsibilities.
  SEC. 3.  Section 12591.1 is added to the Government Code, to read:

   12591.1.  (a) Any person who violates any provision of this
article with intent to deceive or defraud any charity or individual
is liable for a civil penalty not exceeding ten thousand dollars
($10,000).
   (b) Except as provided in subdivision (d), any person who violates
any other provision of this article is liable for a civil penalty,
as follows:
   (1) For the first offense, a fine not exceeding one thousand
dollars ($1,000).
   (2) For any subsequent offense, a fine not exceeding two thousand
five hundred dollars ($2,500).
   (c) Any offense committed under this article involving a
solicitation may be deemed to have been committed at either the place
at which the solicitation was initiated or at the place where the
solicitation was received.
   (d) Any person who violates only subdivision (c), (d), (e), or (f)
of Section 12586.1 shall not be liable for a civil penalty under
subdivision (b) if the person (1) has not received reasonable notice
of the violation and (2) has not been given a reasonable opportunity
to correct the violation.  The Attorney General shall notify in
writing a person who violates only subdivisions (c), (d), (e), or (f)
of Section 12586.1 that he or she has 30 days to correct the
violation.
   (e) The recovery of a civil penalty pursuant to this section
precludes assessment of a late fee pursuant to Section 12586.1 for
the same offense.
  SEC. 4.  Section 12591.2 is added to the Government Code, to read:

   12591.2.  In any case where the Attorney General has authority to
institute an action or proceeding under this article, he or she may
accept an assurance of voluntary compliance through which any person
alleged to be engaged in any method, act, or practice in violation of
this article agrees to discontinue that method, act, or practice.
The assurance may, among other terms, include a stipulation of a
voluntary payment by the person of the cost of the investigation or
of an amount to be held in escrow pending the outcome of an action or
as restitution to aggrieved persons, or both.  The assurance of
voluntary compliance shall not be considered an admission of a
violation for any purpose.  The assurance of compliance shall be in
writing and shall be filed with a superior court in this state for
approval and if approved shall thereafter be filed with the clerk of
the court.  Matters closed may at any time be reopened by the court
for further proceedings in the public interest.  In the event of an
alleged violation, the Attorney General may, at his or her
discretion, either initiate contempt proceedings or proceed as if the
assurance of voluntary compliance has not been accepted.
  SEC. 5.  Section 12598 of the Government Code is amended to read:
   12598.  (a) The primary responsibility for supervising charitable
trusts in California, for insuring compliance with trusts and
articles of incorporation, and for protection of assets held by
charitable trusts and public benefit corporations, resides in the
Attorney General.  The Attorney General has broad powers under common
law and California statutory law to carry out these charitable trust
enforcement responsibilities.  These powers include, but are not
limited to, charitable trust enforcement actions under all of the
following:
   (1) This article.
   (2) Title 8 (commencing with Section 2223) of Part 4 of Division 3
of the Civil Code.
   (3) Division 2 (commencing with Section 5000) of Title 1 of the
Corporations Code.
   (4) Sections 8111, 11703, 15004, 15409, 15680 to 15685, 16060 to
16062, 16064, and 17200 to 17210, inclusive, of the Probate Code.
   (5) Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code, and Sections 17500
and 17535 of the Business and Professions Code.
   (6) Sections 319, 326.5, and 532d of the Penal Code.
   (b) The Attorney General shall be entitled to recover from
defendants named in a charitable trust enforcement action all actual
costs incurred in conducting that action, including the costs of
auditors, consultants, and experts employed or retained to assist
with the investigation, preparation, and presentation in court of the
charitable trust enforcement action.
   (c) Costs shall be recovered by the Attorney General pursuant to
court order.  At the time of entering judgment or approving
settlement of a charitable trust enforcement action, as defined in
subdivision (a), the court shall make findings on whether the
Attorney General's action has resulted in pecuniary benefits or
corrected a breach of trust for any charitable organization, or
charitable purpose.  If the court finds in the affirmative, the court
shall award recovery of costs in the charitable trust enforcement
action to the Attorney General and shall order that costs be paid by
the charitable organization and the individuals named as defendants
in or otherwise subject to the action, in a manner that the court
finds to be equitable and fair.  The court shall not award costs
pursuant to this subdivision which exceed one-third of the pecuniary
benefit to any charitable organization or charitable purpose realized
by the Attorney General's action.
   (d) Upon a finding by the court that a lawsuit filed by the
Attorney General was frivolous or brought in bad faith, the court may
award the defendant charity the costs of that action.
   (e) (1) The Attorney General may refuse to register or may revoke
or suspend the registration of a charitable corporation or trustee,
commercial fundraiser, fundraising counsel, or coventurer whenever
the Attorney General finds that the charitable corporation or
trustee, commercial fundraiser, fundraising counsel, or coventurer
has violated or is operating in violation of any provisions of this
article.
   (2) All actions of the Attorney General shall be taken subject to
the rights authorized pursuant to Chapter 4.5 (commencing with
Section 11400) of Part 1 of Division 3 of Title 2.
